A.S. Watson has reported a flat revenue of HKD73.6bn (US$9.4bn) and 2% decline in operating profit to HKD5.2bn (US$664mn) for its fiscal first half compared to last year.
Results impacted by currency fluctuations
A.S. Watson's revenue has remained flat in the six months to 30th June, with results impacted by adverse foreign-currency exchange similar to results posted for FY2016. In local currencies, however, sales grew by 3% comparable to the same period last year.
Health & Beauty segment grew 7% in local currencies
The Health & Beauty segment saw solid growth with revenue growing by 7% on a constant-currency basis. Trading conditions in general improved in Asia, with improvements observed in China, but trading in Hong Kong continued to be difficult with tourist numbers falling and increased pressure on rental and wage costs.
Network expansion to continue
Two months ago, A.S. Watson Group announced their plans to open 1,400 stores across the world this year to improve overall profits. New stores will be focused in their Health & Beauty segment, the group's strongest performing sector. 500 new stores are expected to open in China, a further 50 in Hong Kong and 55 in Thailand. Increasing their network in Turkey and emerging markets in Eastern Europe are also being considered.
A.S Watsons has confirmed that its presence in UK will also be expanded via opening 30 more Superdrug stores, 45 Savers outlets and 13 The Perfume Shop stores.
Let's wait and see if A.S. Watson's retail revenue improves in FY2017...
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